Armenian state regulators on Thursday formally allowed the French mobile phone giant Orange to sell its subsidiary in Armenia to a local telecommunication company thought to be controlled by a senior government official.
The Public Services Regulatory Commission (PSRC) gave the green light one month after Orange confirmed reports that it is close to concluding a takeover agreement with the Ucom operator, which that runs Armenia’s largest fiber-optic cable network providing broadband Internet and fixed-line telephone connections.
The French giant cited continuing losses incurred by Orange Armenia, one of the country’s three mobile phone operators. “Although the number of our subscribers has reached 650,000 in the past five years, we don’t have the kind of a market share in Armenia that would allow us to continue our operations,” Francis Gelibter, Orange Armenia’s chief executive, said on July 22.
The figure cited by Gelibter accounts for less than 20 percent of mobile phone subscribers in Armenia. The two other local networks belong to Russia’s leading wireless operators, MTS and Beeline.
Orange built and launched Armenia’s third mobile phone network in 2009 after paying 50 million euros ($55 million) for a government license. It claims to have invested 277 million euros in setting up its network covering the entire country. On top of that, it has posted losses totaling almost 185 million euros throughout its operations.
Neither Orange Armenia nor Ucom reacted to the regulators’ decision on Thursday. It thus remains unclear how much the Armenian firm will pay for Orange Armenia.
Ucom is reportedly owned by Armenia’s controversial Finance Minister Gagik Khachatrian and his extended family. The company was founded in 2007 and has since become one of Armenia’s leading Internet service providers. It won a mobile telephony license in late 2013.